Reliance, ONGC and BP will jointly set up a common plant to extract cheap gas from undersea.

ONGC, RIL, BP Gas Project: A major step is being taken to increase the production of natural gas in the country. State-owned Oil and Natural Gas Corporation (ONGC), Mukesh Ambani’s Reliance Industries (RIL) and British giant BP are preparing to come together. These three companies are exploring the possibilities of setting up a common infrastructure i.e. a common facility for extracting gas from deep and ultra-deep seas in the Mahanadi basin. The entire project will cost approximately $1 billion. According to a report in the Economic Times, the scheme will greatly help extract condensate along with natural gas.

The Ministry proposed that consultants would be appointed soon

This special proposal has come from the Ministry of Petroleum and Natural Gas. Currently, the entire scheme is in the initial discussion stage. Officials said that technical consultants will be appointed soon to understand the intricacies of the project. However, there has been no official statement from ONGC, Reliance, BP or the Ministry on the whole matter yet. The Government of India has long wanted oil and gas companies to increase cooperation among themselves so that existing resources can be fully exploited. Under this thinking, preparations are now being made to create this common hub for expensive deep sea projects.

Why was this shared plant needed?

Extracting gas from the deep sea is a very expensive business. This requires huge investment as well as very complex machinery. If each company sets up its own separate plant, the cost of the project will increase significantly. To reduce these costs, a shared infrastructure model is being introduced. An official said that when many operators use the same facility, the cost will automatically come down. This will eliminate the need to set up separate plants for small gas reserves found in the sea. As a result, extraction of gas even from small reserves will be economically beneficial and the speed of work will also increase.

Will the plant be built as a floating or fixed structure?

This shared facility will primarily produce natural gas, along with some condensate. But a decision is yet to be taken as to what this plant will look like. Companies have two options. The first option is a floating production, storage and offloading (FPSO) i.e. a floating unit at sea. Another option is to build a permanent structure in the sea. The advantage of a floating FPSO unit is that it can be prepared in advance and brought directly to the site. At the same time, it can take a long time to build a solid structure. It will take at least three to four years to build infrastructure on such a large scale.

The successful North Sea model will be worked on

The experiment may seem new in India, but the model is already quite successful in many parts of the world. Companies work together in this way in many areas, including the North Sea. Under this international system, two or more companies join together to form a common infrastructure. Once the plant is operational, other manufacturing companies in the area can also use the facility by paying a toll i.e. a fixed rent. This not only facilitates the storage and export of gas in one place, but also gives a new impetus to the country’s domestic gas production.